Class 12 SP Letter of Regret (Non-Allotment of Shares): Format & Solved Draft (Chapter 6)
Master the official format and scoring guidelines for the Class 12 Secretarial Practice (SP) letter on the Letter of Regret (Non-Allotment of Shares) tailored for the Maharashtra State Board (HSC) Commerce examination. Under Chapter 6 (Correspondence with Members), drafting a courteous letter informing an unsuccessful applicant about the non-allotment of equity shares and the refund of application money is a classic high-scoring question in Question 7 (Letter Writing), carrying a direct weightage of 5 marks. Below, you will find the official board exam scenario, step-wise marking breakdown, statutory refund rules under the Companies Act, 2013, and a textbook-accurate solved model answer.
Statutory Rule (Section 39 & Section 40, Companies Act 2013): If a company cannot allot shares to an applicant due to over-subscription or non-fulfillment of allotment criteria, the entire application money received must be refunded within 15 days from the closure of the issue. If the company fails to repay the application money within this statutory timeframe, it is liable to pay interest at the rate of 15% per annum from the expiry of the fifteenth day.
HSC Board Examination Question Scenario
In the HSC examination, this question is typically framed as follows:
"Draft a Letter of Regret to an applicant informing him / her regarding the non-allotment of equity shares due to heavy over-subscription of the public issue, and enclosing a Refund Order."
Official HSC Step-Wise Marking Breakdown (5 Marks)
Examiners evaluate secretarial correspondence based on structural completeness and factual accuracy:
| Component | Required Exam Content | Marks |
|---|---|---|
| Letterhead & Layout | Company Name, Registered Address, 21-digit CIN, Phone, Email, Website, Ref. No., and Date. | 1 Mark |
| Inside Address & Subject | Applicant Name, Address, concise Subject Line, and formal Salutation. | 1 Mark |
| Body of the Letter | Reason for non-allotment (over-subscription), reference to Board resolution, tabular refund schedule, and banking details. | 2 Marks |
| Sign-off & Enclosure | Complimentary close ("Yours faithfully"), Secretary signature block, and mandatory Enclosure ("Encl: Refund Order No. ..."). | 1 Mark |
| Total Marks | Question 7 (Attempt Any 2 Letters out of 3 = 10 Marks Total) | 5 Marks |
Solved Model Answer: Letter of Regret (Non-Allotment of Shares)
KIRAN TEXTILES & APPARELS LIMITED
Registered Office: 401, Nariman Bhavan, 227, Backbay Reclamation, Nariman Point, Mumbai - 400021.
CIN: L17120MH2008PLC185694
Phone: 022 - 6610 8844
Email: secretarial@kirantextiles.com
Website: www.kirantextiles.com
Ref. No.: KTAL/SH-REG/2026-27/102
Date: 25th November 2026
To,
Mr. Kedar N. Bapat,
7, Shreeram Niwas, Gokhale Road,
Dadar (West), Mumbai - 400028.
Subject: Non-Allotment of Equity Shares and Refund of Application Money.
Dear Sir,
The Board of Directors thanks you for your interest in the company and acknowledges receipt of your Application No. EA-92140 dated 18th October 2026 for 100 Equity Shares of the face value of ₹ 10/- each.
I am directed by the Board of Directors to inform you, with deep regret, that the company has been unable to allot any equity shares to you. Owing to an overwhelming response from the investing public, the public issue was heavily over-subscribed. Consequently, the Board of Directors, in consultation with the officials of the BSE Limited and as per the approved Basis of Allotment finalized on 15th November 2026, had to conduct allotment by lottery/proportional allocation, in which your application could not be accommodated.
As per the statutory provisions of the Companies Act, 2013 and SEBI regulations, the application money deposited by you is refunded in full. The particulars of your refund are set out in the schedule below:
| Application No. | No. of Shares Applied | Application Money Paid per Share (₹) | Total Refund Amount (₹) | Refund Order No. |
|---|---|---|---|---|
| EA-92140 | 100 | 2.50 | 250.00 | RO-542109 |
Enclosed herewith please find Refund Order No. RO-542109 dated 24th November 2026 drawn on Bank of Maharashtra, Nariman Point Branch, Mumbai, for ₹ 250/- (Rupees Two Hundred and Fifty Only).
You are requested to detach the enclosed Refund Order and present it for encashment through your bankers. We sincerely regret our inability to allot shares to you on this occasion and look forward to your association with our future corporate issues.
Thanking you.
Yours faithfully,
For Kiran Textiles & Apparels Limited
(Signature)
Mr. Nitin K. Joshi
Company Secretary
Encl: Refund Order No. RO-542109
Examiner's Secret: 3 Critical Points for Scoring Full Marks
- The Tone of Courtesy: Even though the letter delivers negative news, the tone must remain courteous, appreciative of the investor's trust, and regretful (C-L-P-S-P: Politeness).
- Valid Statutory Reason: Always mention "heavy over-subscription" and "basis of allotment approved by the Stock Exchange" as the legal reason for non-allotment.
- Mandatory Enclosure Line: Always write
Encl: Refund Order No. ...at the bottom-left margin. If the payment is electronic, replace the enclosure with bank credit / UTR details.
Frequently Asked Questions (HSC Board Exam FAQs)
1. Within how many days must a company refund share application money?
Under Section 39 of the Companies Act, 2013 and SEBI guidelines, application money must be refunded within 15 days from the closure of the subscription list or date of allotment.
2. What penal interest is charged if a company delays refunding application money?
If the company fails to refund application money within 15 days, it is liable to repay that money with interest at the rate of 15% per annum for the delayed period under Section 40(3) of the Act.
3. Can the company deduct any administrative charges from the refund amount?
No. The company must refund the full application money without any deduction or handling charge to the unsuccessful applicants.